All Forum Posts by: JT Spangler

Spend the money to upgrade the wiring and dedicate a 30A breaker for the dryer. It's the right way to do it, and not a lot of money, especially for a homeowner. 

Send those deals to me, because I'd like to dig more into a property that costs 20k and rents for $500/mo.

Personally, I'm not nearly as experienced as many, but I like to look at cashflow (because I have monthly passive income goals I want to work towards) and cash on cash (because I want to make sure the money of mine I invest is returning well for me).

I'm not a wholesaler, but I've had good luck with a few ifttt recipes for stuff like 'motivated sellers' 'owner will carry' 'investor' 'handyman special'. Really, any search you'd regularly type into craigslist would make a good recipe. Adjust to taste. :)

With a house that old, you could easily uncover issues that cost 100k to repair, like failing structure, foundation, electrical (knob and tube was the standard when the house was originally wired -- this place is so old it predates electricity), heating/cooling (old boiler, furnace, coal chute even?), and you already mentioned the septic. 

That's not to say you should avoid it. Just do extra due diligence before you buy. Double your expected repair expenses (5% is too low to begin with), and find a home inspector who's highly recommended and knows what to look for in old houses. Also, go check and see what permits have been pulled on the property over the years. If the electrical/hvac/plumbing was upgraded, that work should've been permitted, which means you can see when it was done and who did the work. 

If the numbers you posted are accurate and a home inspector finds no major issues, it looks like a pretty good deal.

I have a heavy bag in the basement of my primary, properly secured between two floor joists. I can hang on it and there're no issues. Although when you're hitting it the whole house knows. 

Good for you for letting a good tenant have a perk, and good for him for asking.

You're also financing 100%, which means that's the least amount of cashflow possible (because your payment is as high as it can be). I'd run the numbers on the expenses, because if the property is in good shape and the tenants are long term with no interest in moving (and you self manage), you've probably shaved 20% or more of your expenses.

I know insurance is relatively high in Louisiana, how are the property taxes?

The 50% rule is a guideline, after all. If you get this to cashflow at all it's pure profit, because you put zero down. So I'd at least take a close look at it.

The other cheap update you could do is to but in some brushed nickel or oil rubbed bronze towel holders, toilet paper holders, etc (whichever matches the faucets). Wal-mart sells a set for like 14 bucks. 

So, underneath the top layer of linoleum was 1/4" plywood underlayment. Underneath that was a layer of glued down linoleum. Underneath that was a layer of stapled down linoleum, and underneath that was the original hardwoods. 

Since this is a buy and hold, and I really didn't budget for refinishing the floors, I'm gonna put the vinyl wood plank floating floor over top of it. It'll still have the option of refinishing in the future if I decide to sell, or if I have a long turnover and want to get even higher end finishes. 

I love @Joe Villeneuve's rules, but unless you're in a low income or transitional area (N. Nashville and Antioch are two I've looked at recently) I don't know that they'll work that well in Nashville. 

I think COC and monthly cashflow are the two primary considerations for me. Because I have a monthly cashflow goal for passive income, and also because I really like to see 18-20% COC (meaning that I'm getting really killer returns on my money, and also that I'm getting deals without investing a ton of my own money).

You're very welcome! Let us know if you need anything else.

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